While artificial intelligence (AI) can create opportunities for financial advisers, AdviserSoftware has called on firms to evaluate the potential risks associated with the use of DeepSeek.
In collaboration with Robert Kirk, founder and CEO of InterGen Data, AdviserSoftware has delved into DeepSeek’s terms and conditions, sharing its findings with advisers and providing recommendations on how to approach the use of DeepSeek.
The research revealed that DeepSeek’s terms of use transfer substantial financial burdens to users in case of violations.
Users are required to reimburse DeepSeek for expenses such as legal fees, arbitration costs, and fines resulting from their actions.
This includes liabilities from third-party claims tied to alleged violations of laws, regulations, or platform rules.
In addition, AdviserSoftware warned that DeepSeek’s data practices pose significant privacy risks, particularly given that all user inputs (text, audio, files, chat history) and outputs are stored on servers in China.
Under local cybersecurity laws, companies may be required to share data with authorities upon request.
Furthermore, the collected data includes IP addresses, device identifiers, keystroke patterns, and payment details, with transfers to third parties like ByteDance, raising concerns about privacy and data protection.
While users retain rights to their inputs, DeepSeek secures broad usage rights, including non-exclusive, perpetual licenses to store, modify, and distribute user-generated content for commercial purposes.
Additionally, outputs may be used to train future models, potentially exposing sensitive or proprietary information.
In light of these findings, AdviserSoftware has warned adviser firms to assume all interactions with DeepSeek are monitored and stored indefinitely, and avoid inputting any sensitive or confidential information.
The have also urged firms to consider the implications of data being stored in China, especially in light of strict data protection laws in the EU and UK, and to be aware that generated content could be repurposed commercially by DeepSeek, impacting confidentiality and proprietary information.
Ian McKenna, founder of AdviserSoftware, part of FTRC, said: “ AI offers countless opportunities for advisers to streamline advice process and free up time that can be spent meaningfully with clients, but this must be weighed up against the risks based on these terms and conditions anything you put into DeepSeek can be stored indefinitely and used to create content for commercial purposes.
“The T&Cs give DeepSeek the right to store information, which even extends as far as payment data.
“Advisers should understand the above issues in the context of any AI tool of service they are using.
“While the points identified above are not exhaustive they identify valuable issues advisers should always understand and document before starting to use any technology service.”
Rob Kirk, founder and CEO, Intergen Data, an AI-based Machine Learning company, said: “Financial advisers must be proactive in understanding the implications of AI-driven platforms like DeepSeek.
“Chasing the latest and greatest tech can be thrilling, but the hidden risks around data privacy, ownership, and liability exposure are significant and should not be overlooked.
“Firms must have a clear risk assessment framework and ensure their AI partners align with the highest standards of security, compliance, and ethical AI use.
“At InterGen Data, we focus on leveraging AI responsibly, ensuring financial professionals can access predictive insights without compromising their clients’ trust and data security.”
